ECB opts to stay put on policy action

The European Central Bank Thursday announced no changes to its monetary policy, leaving its key interest rates and asset purchase measures untouched.

As expected, the central bank’s governing council decided to keep the marginal lending facility rate at 0.25 percent, the deposit facility rate at -0.40 percent, and the main refinancing rate at 0 percent. Meanwhile, the pace of so-called “quantitative easing,” its bond-buying program which is currently scheduled to end in March 2017, was also left untouched.

In the run-up to Thursday’s monetary policy meeting in Frankfurt, ECB officials signaled that they are ready to extend the asset purchase program beyond the scheduled end date, as eurozone inflation remains far below their 2 percent target. However, with no fresh measures announced Thursday, the expectations on additional policy actions shift to the ECB’s next monetary policy meeting in December.

Analysts are widely anticipating ECB President Mario Draghi to confirm during the press conference this afternoon that “tapering,” or the withdrawal of monetary stimulus is premature. Despite the rising unease with the ECB’s current monetary policy — especially in Germany — Draghi is expected to reiterate the need for maintaining robust and substantial stimulus to support the EU economy.